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Have you ever heard of absolute water rights?
If you haven't, you soon will.
It's a story over a century in the making, dating back to Civil War times. But its effect has serious profit implications in present day.
It was the 1850s when the first water rights were decreed in Colorado. And by 1864 the entire base flow of the Purgatory River had been appropriated.
About the same time, hundreds of thousands of prospectors began searching for gold in the area. They were the participants of Pike's Peak Gold Rush. You may know them better as Fifty-Niners, after the peak year of the rush.
But those miners not only secured a fortune for themselves, they unknowingly started a trend that would make you a fortune well over a century later.
An Absolute Right to Profit
Mining for gold requires an abundant supply of water for cleaning and moving sediment and rock. When Fifty-Niners diverted water to their mines, they used the same rules that applied to gold: first come, first served.
And that's largely how it's remained, albeit with a few changes in an 1882 Colorado Supreme Court case that allow rights to be transferred for better use.
But the rule of the 1850s still applies. If an entity was the first to physically divert water for beneficial use, it can be given the legal recognition that the right has been perfected, and the right becomes absolute by decree. That means whoever owns it has rights to the water even in dry years. . . even if citizens need it for drinking.
These rights can be bought and sold.
And guess whose in the market for them? Our friend Big Oil. They have been gobbling up rights like a communist regime. . . to the tune of about 50,000 acre feet at over 55 locations. And that's not counting the hundred thousand or so acre feet they've secured via conditional rights.
The Energy Bull You Don't Want to Miss
Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the newsletter below. You'll also get our free report, Oil Outlook: Investing in 2011 by our resident energy expert, Keith Kohl.You see, Big Oil knows water is growing more scarce by the minute.
The amount of freshwater we have stays the same, yet demand constantly rises, propelled by population, increased use for energy needs, and industrialization of the second and third world.
It's escalating to a robbing Peter scenario. . . like when the Colorado River is diverted to quench Southern California or when we overuse the Rio Grande leaving Mexico with only muddy runoff.
Big Oil's got the right idea. They're scooping up water rights on the cheap, hoping to sell them later when shortages become acute and the price rises sharply. It's an absolute right to profit.
And I've discovered a way for you to do the same.
Investing in Water
There are plenty of ways to invest in water. I've been writing about them for years, and have even nailed some triple-digit winners along the way.
But most of the water opportunities to date have been in companies that manage existing water. That is, in the infrastructure companies like Jacobs Engineering (NYSE: JEC) and Flowserve (NYSE: FLS) that provide plants and technologies to improve our water delivery system and better manage our existing supply.
As I said our water supply stays the same. . . only demand rises.
Changing that equation is a multi-billion dollar opportunity. And desalination does just that.
There's been a lot of hype surrounding desalination and its potential to alleviate water problems. But scaling up has proven problematic because of the exorbitant energy costs associated with pressurizing the water for desalination.
That's why only enough water was desalinated last year to cover 0.26% of world water demand.
I've discovered a company that will change all that by reducing the energy requirement for desalination by 60%. It will allow for the widespread use of desalination, and make its shareholders a fortune in the process.
I've seen plenty of great water plays, and I'm confident this one will outperform them all. Buying shares now is like beating Big Oil at their own game. You'll own a piece of the company that will have virtual water monopoly for decades to come, securing your own "absolute" water rights in the process.
To ensure you take advantage, I've compiled a new report that spells out all the details. But you have to hurry. I just released this report yesterday, and the stock has already climbed 18%.
Call it like you see it,
Nick
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Water rights in CO are real property and can be bought and sold. The rights must strickly adhere to the original decrees and historic practise. The amount of water than can be changed from one use to another is based on the historic consumptive use that has occured based on the USE of the water right. Water rights are subject to abandonment if it can be shown there has been an intent to abandon.
Oil companies and many others have acquired conditional water rights awarded in priority because in CO its State Constitution states that the right to the unappropriated water shall never be denied. Conditional water rights must periodically provide evidence to the Court that a diligent effort is being made to perfect the water right so that it can become an absolute water right.
It is surprising that the oil companies have not investigated a truly new fresh water Source that can be developed to provide a million acre feet ( 325,900,000,000 gallons) EACH YEAR without damage to the environment or the water rights of anyone, anywhere. The million AF could be exchanged with CA, NV & AZ to be utilized for oil shale development in CO, as needed.
The new water is NON-TRIBUTARY to the CO River basin and consequently could be stored in Lake Mead to keep it reasonably FULL and generating 2000 megawatts of renewable energy CREDITS each year.
The movement of water in the SW is based on the question of DAMAGE; if there is no DAMAGE to others, the possiblities with watr are still endless...are you listening Las Vegas, Los Angeles and San Diego ?
WaterSource waterrdw@yahoo.com Retired Water Rights Analyst